The Issue Presented
The only issue presented in this case is whether or not Mary Joy’s action presents an intra-corporate dispute that belongs to the jurisdiction of a specially designated commercial court.
The Ruling of the Court
It is a basic rule that jurisdiction over the subject matter is determined by the allegations in the complaint.[1] It can be gleaned from Mary Joy’s allegations in her complaint that her case is principally one for recovery of possession. Immediately upon the execution of the MOA in 1993, Mary Joy took possession of Hacienda Imelda, through her mother, and started planting sugarcane on it. In 1997 Young, with the use of force, took over the property with the farm equipment and implements. Despite several demands to vacate and surrender Hacienda Imelda, Young continued to cultivate and plant sugarcanes on the property up to 2002, and even entered into a new lease contract with Jose Vicente. It must be stated that regardless of the actual condition of the title to the property, the party in peaceable quiet possession shall not be turned out by a strong hand, violence or terror. Thus, a party who can prove prior possession, can recover such possession even against the owner himself. Whatever may be the character of his prior possession, if he has in his favor priority in time, he is entitled to remain on the property until he is lawfully ejected by a person having a better right.[2]
Here, Jose Vicente and Young mainly argued in their Motion to Dismiss that inasmuch as the subject property is in the name of A.G. Agro, the nature of the claim or controversy is one of intra-corporate. The Court has ruled in the past that an action to recover possession is a plenary action in an ordinary civil proceeding to determine the better and legal right to possess, independently of title.[3] But where the parties raise the issue of ownership, as in this case, the courts may pass upon such issue to determine who between the parties has the right to possess the property. This adjudication, however, is not final and binding as regards the issue of ownership; it is merely for the purpose of resolving the issue of possession when it is inseparably connected to the issue of ownership. The adjudication on the issue of ownership, being provisional, is not a bar to an action between the same parties involving title to the property.[4] Also, any intra-corporate issues that may be involved in determining the real owner of the property may be threshed out in a separate proceeding in the proper commercial court.
WHEREFORE, the Court GRANTS the petition and REVERSESand SETS ASIDE the Decision of the Court of Appeals in CA-G.R. SP 85887 dated August 11, 2006. The Court likewise ORDERS Jose Vicente Gustilo III and Teresita Young to answer the complaint in Civil Case 723-C, Regional Trial Court Negros Occidental, Branch 60.
SO ORDERED."
